**Executive Summary**
The Reserve Bank of India (RBI) issued amendment directions effective January 9, 2026, modifying the "Small Finance Banks- Prudential Norms on Capital Adequacy) Directions, 2025." These amendments revise the risk weighting of claims on non-resident corporates based on ratings assigned by international rating agencies, including those originating at the International Financial Services Centre (IFSC). The changes take immediate effect.
**Key Points / Main Content**
* **Risk Weighting for Non-Resident Corporates:**
* **General Risk Weighting:** Claims on non-resident corporates are to be risk weighted according to ratings from international rating agencies per Table 8.1.
* **IFSC Specific Risk Weighting:** Claims on non-resident corporates originating at IFSC rated by M/s CareEdge Global IFSC Limited are to be risk weighted per Table 8.2.
* **Table 8.1 (S&P/Fitch/Moody's):**
* AAA to AA: 20%
* A: 50%
* BBB to BB: 100%
* Below BB: 150%
* Unrated: 100%
* **Table 8.2 (CareEdge Global IFSC Limited):**
* AAA: 20%
* AA: 30%
* A: 50%
* BBB: 100%
* BB & below: 150%
* **Explanation on Unrated Claims:**
* Unrated claims exceeding ₹200 crore attract a 150% risk weight.
* Claims exceeding ₹100 crore previously rated but now unrated also attract a 150% risk weight.
* Unrated corporate claims cannot receive a risk weight preferential to the corporate's sovereign of incorporation.
* **Use of International Credit Rating Agencies:**
* Banks can use ratings from CareEdge Global IFSC Limited (for IFSC exposures), Fitch, Moody's, and Standard & Poor's for risk weighting.
* **Effective Date:** The amendments take effect immediately.
**Impact Analysis**
**Small Finance Banks (SFBs)**
* **Impact:** SFBs must adjust their capital adequacy calculations based on the revised risk weights for claims on non-resident corporates.
* **Action Required:** SFBs need to update their risk management systems and processes to reflect the new risk weighting guidelines and ensure compliance.
Key Entities Referenced
Reserve Bank of India (Small Finance Banks- Prudential Norms on Capital Adequacy) Amendment Directions, 2026: The primary subject of this document, outlining amendments to the capital adequacy norms for Small Finance Banks.
Reserve Bank of India (Small Finance Banks- Prudential Norms on Capital Adequacy) Directions, 2025: The previously issued directions that are being amended by the 2026 Amendment Directions.
Banking Regulation Act, 1949: The act that empowers the Reserve Bank of India to issue these directions.
CareEdge Global IFSC Limited: An international rating agency whose ratings are used for risk weighting claims on non-resident corporates originating at the International Financial Services Centre (IFSC).
International Financial Services Centre (IFSC): Location where non-resident corporates originate, for which ratings are assigned by CareEdge Global IFSC Limited.
भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
_________________________ ______________________
www.rbi.org.in
RBI/2025-26/190
DOR.STR.REC.391/21-01-002/2025-26 January 09, 2026
Reserve Bank of India (Small Finance Banks- Prudential Norms on Capital
Adequacy) Amendment Directions, 2026
Please refer to Reserve Bank of India (Small Finance Banks- Prudential Norms on
Capital Adequacy) Directions, 2025 (hereinafter referred to as ‘the Directions’).
2. On a review, and in exercise of the powers conferred by the section 35A of the
Banking Regulation Act, 1949 and all other laws enabling the Reserve Bank in this
regard, the Reserve Bank being satisfied that it is necessary and expedient in the
public interest so to do, hereby issues the Amendment Directions hereinafter
specified.
3. The Amendment Directions modifies the Directions as under:
(1) Para 39 shall be substituted by the following:
“39. The claims on non-resident corporates shall be risk weighted as under as per the
ratings assigned by international rating agencies. Further, with regard to claims on all
non-resident corporates originating at International Financial Services Centre (IFSC)
for which ratings are assigned by M/s CareEdge Global IFSC Limited, the mapping
shall be as per Table 8.2 below.
Table 8.1: Claims on non-resident corporates - risk weight mapping for
the ratings assigned by S&P/Fitch/Moody’s Ratings
S&P / Fitch
AAA to AA A BBB to BB Below BB Unrated
Ratings
Moody’s ratings Aaa to Aa A Baa to Ba Below Ba Unrated
Risk Weight (%) 20 50 100 150 100
विवियमि विभाग, केंद्रीय कायाालय, केंद्रीय कायाालय भिि, 12िी/ीं 13िी ींमींव़िल, शहीद भगत व ींह मागा, फोर्ा, म ींबई - 400001
र्ेलीफोि/ Tel No: 22661602, 22601000 फैक्स/ Fax No: 022-2270 5691
Department of Regulation, Central Office, Central Office Building, 12th/ 13th Floor, Shahid Bhagat Singh Marg, Fort, Mumbai – 400001
हहदिं ी आसान ह,ैं इसका प्रयोग बड़ाइएTable 8.2: Claims on non-resident corporates - risk weights mapping for the
ratings assigned by M/s CareEdge Global IFSC Limited - for claims originating
at International Financial Services Centre (IFSC)
CareEdge
BB &
Global IFSC AAA AA A BBB
below
Limited
Risk Weight (%) 20 30 50 100 150
Explanation –
(i) Unrated claims having aggregate exposure from banking system of more
than ₹200 crore shall attract a risk weight of 150 per cent.
(ii) Claims with aggregate exposure from banking system of more than ₹100
crore which were rated earlier and subsequently have become unrated shall
attract a risk weight of 150 per cent.
(iii) No claim on an unrated corporate shall be given a risk weight preferential
to that assigned to its sovereign of incorporation.”
(2) Para 118 shall be substituted by the following:
“118. A bank may also use the ratings of the following international credit rating
agencies (arranged in alphabetical order) for the purposes of risk weighting its claims
for capital adequacy purposes where specified:
(i) CareEdge Global IFSC Limited (for all non-resident corporate exposures
originating in IFSC);
(ii) Fitch;
(iii) Moody's; and
(iv) Standard & Poor’s.”
4. The above amendment shall come into force with immediate effect.
(Vaibhav Chaturvedi)
Chief General Manager
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